INDIABULLS POWER IPO Price Listing Date IPO Status

INDIABULLS POWER IPO Price Listing Date IPO Status
Indiabulls Power is entering the capital market on 12th October 09, with a public issue of 33.98 crores equity shares of Rs. 10 each, in the price band of Rs. 40 to Rs. 45 per share.
Recent power IPOs have not been very good, like NHPC - still on Rs.33 and Adani Power still at 101,

What are plans from INDIABULLS POWER IPO
has plans of setting up 6,600 MW Power Plants,operational by March 2012,
All the projects has seen financial closure and equity tie up, for its with total capacity,

not advised to subscribe to the shares, beyond Rs. 40, especially for retail investors, it is necessary to be cautious,

in view of Adani Power and NHPC, now available at much better valuations, then this company.

YUKEN INDIA

Yuken India manufactures hydraulic equipment including hydraulic pumps for industrial and mobile applications, hydraulic valves, mobile valves and complete hydraulic systems to suit customer-specific requirements.
Hydraulic devices are mainly used in the heavy engineering industry for automation. With automation the buzz all around, Yuken’s products have a good demand. This perception of good demand has been reflected in the share price but unfortunately it has not been seen in the financial performance.
For FY09, the company posted net sales of Rs.105.48 crore and on this, it posted a net profit of a meager Rs.99 lakhs. The company had posted a loss in Q3FY09 but it managed to turnaround in Q4FY09 with a tiny net profit of Rs.20 lakhs.
The stock enjoys fancy on account of its brand name. Its been around for the last 31 years, with most manufacturers of Original Equipment using Yuken as their preferred partners for hydraulics. Yet given the current performance, an EPS of Rs.3.30 on a FV of Rs.10/share, a PE of over 18 at the current market price, comes forth as being more than fully priced. thanks

RENUKA SUGAR One of Bullish Sugar Sector Stock

Keep a bullish view on the Big Sugar Companies and sugar sector. One more big sugar company posted results. Renuka Sugar has posted net profit of Rs.33.20 crores on total income of Rs.443 crore for second quarter ending 31st March 09, on consolidated basis. These results either look bad or flat when we compare it with the results of corresponding quarter, in the previous year, as PAT was at Rs.32 crores on total income of Rs.561 crores. So, a drop in the topline of 21% and rise in PAT by just 3.75% . Does this mean that the company has not been able to take advantage of bullish cycle of sugar sector?
Wall These results are very good. This is because, there is an increase in stock and inventory of Rs.336 crores during the quarter, while for 6 months ending it has risen by Rs.578 crores, which were risen by Rs.174 crores and Rs.274 crores, respectively for the respective period in the previous year.
The company has also made huge import of raw sugar, estimated to be close to 40 lakh bags, on which, it is likely to make a PBT of Rs.150 crores. In sugar segment, the company had an EBIT of Rs.20.60 crores for March 09 quarter on income of Rs.294 crores while same were at Rs.10.30 crores on Rs.159 crores in the corresponding quarter of previous year.
In summary, results are very good if we consider the gain to be made by the company on its inventory in the coming quarters and not to forget for keeping a bullish view on the Big Sugar Companies and sugar sector thanks

SATYAM Bidding process News Satyam Share price

SATYAM STAKE SALE Bidding process will be received by 10 a.m. on 13th April and would be opened on that day itself. Since market is closed on 14th April,
Who are final bidders for Satyam?
As of date, there are 4 serious bidders in the fray and they are L&T, Tech Mahindra, Cognizant Technologies and P E Firm W L Ross.
Earlier, iGate, Hinduja Group and B K Modi controlled Spice Group opted out of the race, though, Spice Group maintains that it could re-enter the bidding, if its conditions for an open auction and transparent process are met.
There has been speculation that IBM has pulled out of the race, on fears of 13 US Class Action Suits, filed against Satyam in courts by ADR holders.

What will be the expected Satyam Share price after bidding?
Satyam is owning close to 75 lakh Sq.Feet of constructed area across the globe.
The present value of all these real estates is pegged at close to Rs. 4,000 crores.
prospects of recovering funds of Satyam, having diverted to Maytas. valuation of Rs.60- Rs.72 per share. Also, if two top acquirers are in a 10% band, open bidding can take it to upper range of Rs. 72.

Suggestion to the Satyam Stock investors.
Going with current trends bids are likely to be aggressive and share price is likely to react upward. In this situation, if one remains invested upto 15th April in the stock would stand to gain.

Bajaj Holdings Debt Free Stock To Invest in

Yesterday, the stock has gained 5.54% and ended the day at its high at Rs.71.40. And this gain is in a market which saw a sell off and it punished even companies which had posted good results.
The company has a net sales of Rs.71 lakhs and on this sales, it continues to have a staggering employee cost of Rs.3.28 crore. It posted an other income of Rs.2.17 crore. In Q2FY09, it posted its best ever PAT of Rs.12.98 crore and this was mainly on account of the interest received on Income-Tax refunds. This was at nil for Q3FY09. Infact it plans to make provision for tax and deferred tax only in Q4. Yet, its net loss for the current third quarter was at Rs.1.10 crore.
There has been talk of Blackstone wanting to buy out the 27% stake held by Western Maharashtra Development Corporation (WMDC) but that has apparently not happened. So why does this stock such a high discounting on the bourses despite the dismal performance?
Another big positive for the company is that it is totally debt-free.
So financially, the company is breaking no records but surely, thanks to its holdings, the valuation goes up tremendously. thanks

Cipla Results Analysis A Pharma Stock

For the third quarter ended 31st Dec 2008, the reduction in operating costs, helped the company post a better performance. The reduction in costs was also on account of the depreciating rupee which improved on account of the improved exports. Exports are booked at prevailing rates and hence the company stood to benefit.
OPM for Q3FY09 was at 23.42% compared to 16.82% in QoQ and 25.94% on a YoY. NPM was up at 16.65% compared to 11.18% on a QoQ and it came down from 19.07% on a YoY.
Cipla has formed two new partnerships in US and Canada. It has two drug launches on anvil – budesonide inhalers in Germany and Portugal and salbutamol MDI in Denmark and Portugal. Cipla has one of the widest product ranges, with a presence in about 65 therapeutic categories.
Currently, like many other Indian pharma companies, Cipla’s consignment too has been caught. Cipla’s export consignment to Peru was seized at Amsterdam in early Feb 2009. This has been valued at around US$30,000 and the company blames this on the conspiracy of the Big Pharma, to ensure that Cipla’s generics drug does not reach the markets. One does not know the truth behind the allegations but this is a real problem which Cipla and many others are currently facing abroad.
The company is expected to show pressure in the current quarter and one has to wait and see what impact the depreciating rupee would have on the margins. thanks

ALLCARGO GLOBAL No SlowDown Here

The company has a unique business model plus presence across major ports in India which places it in a better position to tide over the challenge. Also in its Container Freight Station (CFS) business, where revenue is earned for storing the goods in their premises, prior to customs clearances; due to the slowdown, it’s now being stored for longer periods of time and that in turn means more CFS revenue.
Another positive for the company is that Blackstone has a stake in the company and that means the company has direct access to PE funding when in need and that’s a big plus in today’s time.
The company has posted good results for the year ended 31st Dec 2008. Net sales was up 43% at Rs.516.54 crore and despite a surge in operating expenses, depreciation outgo, taxation and interest outgo which rose from Rs.2.09 crore in Dec 07’ to Rs.12.71 crore in Dec 08’. Net profit was up 62% at Rs.96.70 crore.
CFS income for the year ended Dec 08’ was at Rs.148.31 crore, Multimodal Transport Operation (MTO) segment revenue was at Rs.338.46 crore and revenue from equipment hiring was at Rs.44.27 crore. The company has a good leadership in domestic LCL (less-than-container load) segment and given the shift from air cargo to ship, Allcargo will stand to benefit. The company has a significant presence in iJNPT, Chennai and Mundra ports. It has already expanded its Chennai CFS capacity from 50,000 TEUs to 84,000 TEUs. thanks

HDFC BANK Q3 Results Up by 58.78%

The market was expecting probably a lot more from HDFC Bank which is the only explanation why the share price came down after the results for the third quarter were declared. It was at an intra day high at Rs.1023.80 but after the results, it went on to touch an intra day at Rs.965.25 and then it recouped and ended the day at Rs.973, down 1.61% over previous day’s close.

The results for the quarter ended Dec 31, 2008 include operations of erstwhile Centurion Bank of Punjab Ltd, following its amalgamation with HDFC Bank with effect from April 1, 2008. Its total income went up 58.78% YoY to Rs 5407.89 crore. Its Net Interest Income (NII) was up 37.66% at Rs 1979 crore. NIMs for current fiscal is expected to remain around 4.2% to 4.4%.

Its other income was up 38% at Rs 939 crore. Other income relates to Income from non-fund based banking activities including commission, fees, foreign exchange earnings, earnings from derivative transactions and profit and loss (including revaluation) from investments. The Bank’s Q3 net profit was up 44.8% at Rs 621 crore.

On a QoQ basis, a further scrutiny in the results shows that its main revenue earner has been treasury operations, which rose 37% while wholesale/corporate banking was up 18%. Retail banking took a hit and was down 3.7%. But with interest rates coming down, the retail segment is expected to pick up in the coming months.


During the quarter, advances grew at 34.28% while deposits grew by 45.8% on a QoQ. Capital Adequacy Ratio (CAR) for Q3FY09 was at 13.7%, which in Q2FY09 was at 11.4%. CAR is a ratio of the Bank’s capital to its risk. So higher the percentage of CAR, it is considered less risky and it indicates the soundness and stability of the banking system.

Its NPA for Q3FY09 was same as what it was in Q2FY09, at 0.6%. As on December 31, 2008, the total number of branches (including extension counters) and the ATM network stood at 1,412 branches and 3,177 ATMs respectively.

Outlook for the future? It looks stable and with the interest rates coming down, the Bank would probably see some better tidings. With the Bank also clarifying that it does not have any material exposure to Satyam, it remains a safe bet. thanks

BHEL Best PSU stock to Buy Now

BHEL Best PSU stock to Buy Now, The effect of the slowdown cannot be seen in this PSU capital goods company. Infact it seems to be business as usual, with orders burgeoning as has always been the trend.

For the first half ended 30th September 2008, BHEL posted a 31% rise in net sales on a YoY. The value of production (net of excise duty) has also improved by 34.07%. Other operating income was at Rs.599 crore which included one time interest income of Rs.267 crore on IT refund of earlier years. PAT was at Rs.1000.20 crore as against Rs.976.60 crore (Rs.847.60 crore excluding interest on IT refund) in Q2FY08.

Orders worth Rs.14,350 crore were received during the current Q2 and order outstanding currently is at about Rs.1,04,000 crore. So the company continues to have the issues of a huge backlog and unless the expanded facility or new facility does come up soon, this burgeoning issue of order backlog will continue to dog the company.

Wage revision is also a big issue, infact the biggest bane of PSUs. For BHEL, the provision for wage revision was reassessed in the current year at Rs.1907 crore for the period from 01.01.07 to 31.03.09. Amount already provided upto 31.03.08 was Rs.594 crore. Balance Rs.1313 crore is being provided in the year 08-09. In the first 2 quarters of 08-09, Rs.547 crore has been provided. This wage revision is about 5% of the market share of the turnover and will continue to remain so for the next 2- 3 years, denting the margins.

The stock has recovered strongly from the low of Rs.984. Stay invested and if it goes below Rs1000, pick up the stock again
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WALCHANDNAGAR INDUSTRIES promising stock To invest

Walchandnagar Industries has been around for the last 100 years and that in itself is a very big deal, as today, the company’s come and go in the blink of an eyelid. The company, which was earlier named Marshland & Price, has been named after the late Walchand Hirachand who bought it from the British owners.
In its 100th year, the company has managed to maintain its growth rate. For the year ended 30th September 2008, its net sales rose 10% and managing to keep operating expenses at around 9.5%, it managed to post a 10% rise in EBITDA at Rs.69.73 crore. PAT was up 12% at Rs.39.77 crore. On an equity of Rs.7.61 crore, its EPS now stands at Rs.12.32, on a face value of Rs.2 per share.
The company is also majorly into thermo-dynamic and related co-generation as well. A plant converting solid waste to power was already working in Hyderabad, while another one is on the anvil in Karnataka.

The company is planning a Capex of Rs.50 to Rs.100 crore in the Walchandnagar plant and the foundry division in Satara. The next fiscal is expected to be much better as towards the second half of FY10, orders would start coming in from the proposed nuclear power plants and for expansion of existing ones.
Walchandnagar Industries Ltd is an ISO-9001 -2000 certified, multi product,multi discipline,high-tech, heavy engineering, Projects execution company catering to diverse Industries such as:

The stock is currently quoted at Rs.88, which is a tad higher than its new low it made on 27th Oct at Rs.82. Shareholders would do best to hold on to the stock as the promise for the future looks good, so don't think go ahead.
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Walchandnagar Industries Ltd.'s Audited Financial Results for the Year Ended 30.9.08 are declared

SIEMENS LTD Q2 Results Not So Impressive

The market is disappointed with the financial performance of Siemens and this has been reflected in the tumbling share price. From Rs.268, the stock yesterday fell down by over Rs.40 and ended the day at Rs.224. The current low perception for capital goods stocks did not help.
For the year ended 30th September 2008, the company reported a 8% rise in net sales of Rs.8357.72 crore. Its operating expenses rose 7% and its EBITDA managed to stay up marginally by 3% at Rs.910.36 crore. Though interest outgo remained more or less stable, depreciation outgo rose 29%. PBT was up 2% at Rs.891.77 crore. But high tax outgo finally pulled down the PAT, which was down marginally by 0.54% at Rs.593.33 crore.
The fall in the PAT would have been much higher but for the gain of Rs.124.58 crore it reported under exceptional item. This gain was on account of the profit it made on sale of its automotive and building technology segment.
It declared a 1:1 bonus in January 08’ and it also declared a 150% final dividend for the year. So there might not have been any major appreciation in terms of the stock price but surely shareholders have got advantage of capital appreciation.
The company stated that higher expenditure in executing certain large projects has impacted the margins. It had bagged a large order from Qatar in the previous year. Because of the high base, the order book shrank by 14% in September 08’. Currently, the company has an order book of Rs.9834 crore, of which Rs.8,718 crore has been added in 2007-08. Liquidity crunch has impacted the decision-making process of the company, due to which planned investments have been deferred.

Siemens has divested 51% stake in its subsidiary based in Bangalore to Siemens Corporate Finance and the Board has also approved acquisition of the balance 50% stake in Kolkata-based Flender.
Yet, Siemens remains a very strong company.
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TANLA SOLUTIONS Waits Till Citigroup Settles down

Despite the circumstances, Tanla Solutions has done exceedingly well for itself for the second quarter ended 30th September 2008. On a YoY basis, the consolidated net revenue of the company has grown by 97% at Rs.211.15 crore and despite the operating expenses more than doubling, the company posted a net profit of Rs.70.54 crore, a rise of 92%. Even on a QoQ, the performance has been good. Net revenue rose 26% and PAT showed a growth of 25%.

And yet, the company yesterday touched a new at Rs.59, though it recovered from that level and settled above Rs.60 levels. But why did it touch a new low in the first place? Well, the beleaguered Citigroup has a 8.75% stake in the company and given the trouble that it is in, the market perception is that Citi would now be pressing sales in all its holdings in Indian stocks. Though a rescue package has been announced, there is still concern that Citi would continue selling to shore up its liquidity to tide over the current crisis.

Tanla remains a very sound company. A zero debt company, being mainly in the telecom sector, the impact of the global financial crisis is muted. The mobile market in both UK and India remain resilient to recent economic upheavals. Emerging markets like India too have shown healthy trends in mobile services. In September alone, there was a record 10 million subscriber addition with the total mobile subscriber figure crossing the 300 million milestone.

In Q2, Tanla's Mobile Payments performance highlighted the increasing global shipments of smart and feature phones. License Manager installations from Tanla OY were close to 6 million handsets with September alone doing close to 3 million. All smart phones being sold by manufacturers like Nokia carry Tanla's mobile application rights management product. This service is now available in India through Tanla's tie-up with Airtel and would shortly be rolled out with other operators.

The stock price could continue to see some more volatility, till things do not settle down on the Citigroup front.
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SOBHA DEVELOPERS Play It Wise Think About It

Things do not seem to be going ahead too well for this South India based realtor. It is not an isolated company which is facing tough times as for the whole sector, fall in demand, tight liquidity, high interest rates on home loans; all together have played havoc with even the biggest in the industry. Many realty companies have frozen earlier announced projects, some even canceling them and all of them now going slow on completion schedules.

Trouble had started brewing in Sobha since the start of this fiscal. It’s just that things got tighter in second quarter ended 30th September 2008. Its net sales, on a YoY, dropped 8%. Interest outgo shot up by a whopping 115% and this indicates the liquidity crunch the company is facing. This had a cascading affect on the profitability, with PBT slipping 14% and PAT by 13% at Rs.49 crore. OPM was down from 17.26% to 16.32% and NPM was down from 8.91% to 7.94%. What is noteworthy here is that with effect from April 01, 2008 the company has changed its accounting policy for revenue recognition for sale of undivided share of the land (group housing) on the basis of certain minimum levels of collection of dues from the customer and / or agreements for sale being executed rather than criteria relating to the project recasting a significant level of completion, to align it with revenue recognition policy for sale of villa plots. This has resulted in additional revenue recognition for Q2FY09 at Rs.16.3 crore and higher PBT of Rs.9.90 crore.


The company currently has about 12 million sq ft under construction. As of September 30, 2008, the company has completed 44 residential/commercial in-house projects and 124 contractual projects covering about 14.93 million sq ft. The company has approximately 10.84 million sq ft under construction for Infosys. It has 30 residential/commercial ongoing projects.

Interestingly, the company has literally stopped buying any more land. Its cost for land acquisition for current Q2 was down at Rs.5.30 crore, down from Rs.74.50 crore in Q1FY09 and certainly a far cry from the staggering Rs.156.14 crore it spent in Q1FY08.

On 18th November, Sobha Developers pledged 43 lakh shares or 5.90% stake to Switzerland-based Bank Sarasin and with this its total pledged shares with Sarasin stands at 13.72%. This is as per the agreement but it also indicates the deep liquidity issues facing the company. After this news, the stock, not surprisingly touched a new low at Rs.87.
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TATA MOTORS Q2 Results Not So Good

YoY, the net sales of the company for Q2FY09 showed a marginal 6% rise at Rs.7078.85 crore. Tata Motors’ total vehicle sales saw a decline of one per cent to 1.35 lakh units in current Q2. Volumes in passenger cars and utility vehicles slid from 51,618 units to 47870 units and this was on account of phasing out of old models of Indica. Its other income shot up by over 5 times and this was because the company had sold part of its long term investments, on which it made a profit of Rs.358.81 crore and this forms the chunk of the other income component. Its operating expenses rose 16% and interest outgo rose by 54%. Net profit was down 34% at Rs.346.99 crore.

The coming quarters are expected to be tougher. After the September quarter, the going has only got tougher. Sales, which are usually at their peak during Diwali were no where near even normal. The pile of inventory had been so much that it had to shut down its commercial plant at Jamshedpur for 3 days and those in Pune and Lucknow for 6 days.

Over and above all this, the company is grappling with the huge bill of the Jaguar, Land Rover takeover. The vehicle maker's plans to raise Rs.4150 crore via two rights issues in October were hit by a stock market slump, with the promoters themselves covering for most of the issue. Now their stake stands raised to 42% from 33%. Post-rights, the public shareholding in the company has come down to 45.8% from 51.75%. Life Insurance Corporation, one of the large shareholders of Tata Motors, and Daimler did not participate in the rights issue. Post rights, LIC’s stake has come down to 9%, while Daimler’s has dipped to 4.5%.

There is also the issue of the shifting of the Nano from Kolkatta to Gujarat. Though the Gujarat Govt has bent over backwards to accommodate Tata Motors, the company itself will have to bear a huge cost on account of the shifting and the subsequent delay in launching the small car. The Tata group will invest Rs.2,000 crore to manufacture the Nano and its variants including an electric car and a CNG car. Naturally, the cost of all this will get reflected in the balance sheet on this fiscal.

The second half is not expected to be very good for the company. Q3 might infact be the worst quarter this fiscal.

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EVERONN SYSTEMS Only Expected to Grow

Education is big business in India and given the population and the illiterate, this business is only expected to grow. In India there are 2.80 lakhs private schools and 17625 colleges, so far less than 1% are covered by organized players who provide technology enabled education. Everonn provides virtual and technology enabled learning systems. Currently Everonn has its presence in 4362 school, in 12 states and has aggressive plans to take the number to 5164 in FY09 and to 7514 by FY10.

And going by the performance it has belted out in second quarter ended 30th September 2008, looks like its target could be met. YoY, its consolidated net sales rose 89% and despite a 81% rise in total expense of which employee cost by 98%, the company posted a 151% rise in PAT at Rs.6.51 crore.

In Q2FY09, it managed to add 279 new schools, which is a phenomenal growth given over the last 2.5 years, it was able to add just 500 totally, into the virtual classrooms. Less than 35% business of the company comes from Govt institutions, so to that extent, it’s assured of timely payments, at least for the 65% of its business.

Going by the past track record, the first and the third quarters are usually lean period and all the new business comes in during Q2 and Q4. So if the same trend continues, after a lean Q3, it hopes to have another robust Q4 and expects to end the current fiscal on a high note. In FY09, it has projected a topline of Rs.190 crore and bottomline of Rs.30 crore. Seems a bit too ambitious, given the slowdown and the liquidity crunch.
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ROLTA INDIA Befefits From Nuclear Deal

This Tata group company, a likely beneficiary of the nuclear deal, has posted a good performance for the first quarter ended 30^th September 2008, but for the huge MTM forex loss.

Consolidated revenue for Q1 FY-09, on a YoY was up 56.6% at Rs. 346.14 crores, while Q0Q, it grew by 7.8%. EBITDA on a YoY rose by 41.1% at Rs.118.46 crores which on a QoQ showed a growth of 5.6%. PAT before exceptional item was at Rs.85.25 crores, up YoY by 58.4% and by 5.2% on a QoQ basis. But after considering the MTM forex loss of Rs.61.35 crore, PAT has shown a huge fall. YoY it fell 56% while QoQ it fell 53% at Rs.23.90 crore. The MTM loss is on the US$150 million FCCB which is due for maturity only in June 2012.

The company is extremely gungho about the current fiscal’s second half and is amongst the very rare breed of companies which is expecting to maintain growth of 40% in the topline. How is that possible? The company has explained that it operates in unique segments like infrastructure, defence, geo-space, and engineering and is therefore not affected by the banking and insurance slowdown.

The company's current order book position stands at Rs.1,500 crore. Rolta is one company which is expected to benefit from the nuclear deal, mainly due to its JV with the Shaw group, which has a 70-80% of the world market for nuclear power plants design and for installation and commissioning. But the revenue from this is expected to come in only after the next 18-24 months.
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Markets Cheeers on Data IIP Numbers

Indian markets jumped up, snapping early losses, on the back of IIP data which was in line with expectations. At 12:17 pm, BSE Sensex was up 71 points or 0.73 per cent at 9,902. iip data

Index of Industrial Production for September grew by 4.8 per cent compared to 1.3 per cent in the previous month but lower than 6.98 per cent year-on-year. Manufacturing rose 4.8 per cent against 7.45 per cent y-o-y. Capital goods advanced 18.8 per cent versus the 20.9 per cent growth last year. Mining and consumer durables production were at 5.7 per cent and 13.1 per cent respectively, up from the last year.

“The IIP figures, at first glance, appear to be better than expected and that's probably due to companies building up their inventories before the festive season,” said Alok Agarwal, head - research, KR Choksey.

The industrial growth was expected at 4.5-5.1 per cent for September against the 13-year low of 1.3 per cent in August. Economists had pegged the baseline industrial growth at 4.8 per cent.

Top Sensex gainers were TCS (3.63%), NTPC (3.57%), HDFC (3.47%), Wipro (3.29%) and Tata Power (2.83%).
reports e-times

Tata Chemicals Fundamentally Strong Stock

Despite a 7% fall in demand for soda ash, Tata Chemicals rode high on the back of very good demand from Latin America and Europe. On a consolidated basis, the company was able to post a phenomenal 167% (YoY) rise in topline at Rs.4706 crore for the second quarter ended 30^th September 2008. Of the total revenue, inorganic chemicals clocked about Rs.2,730 crore and fertilizers at Rs.4,152 crore

Then the company incurred a MTM forex loss of Rs.167 crore on an external commercial borrowing of $475 million raised to finance the acquisition of General Chemicals Industrial Product Inc (GCIP) in March 2008. This dented the bottomlines and its PAT rose 34% at Rs.278 crore. Of this, GCIP contributed Rs.44 crore. But for the forex loss, like in Q1FY09, the company in Q2 would have also posted a phenomenal PAT.

Due to the overall softening of prices across the board, fall in demand from USA and threat from China, price of soda ash is expected to remain at more or less the same levels in Q3. In the coming quarters, business from US is expected to remain low but it plans to continue its focus on Latin America and Europe. There is also a threat coming in from China, which is hiking its capacities in soda ash though that is not expected in current fiscal.

The company is expected to put on hold some projects that take longer gestation and also the previously contemplated de-bottlenecking plans are to be postponed to next fiscal. . GCIP is expected to repay $350 million bridge loan in the current month.

Currently quoted at Rs.163 levels, Tata Chemicals remains a fundamentally strong stock.

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BOMBAY DYEING textiles Stocks Wait and Watch

Bombay Dyeing & Manufacturing Company which posted a loss of Rs.48.34 crore in the first quarter of current fiscal, extended these losses further in Q2. It posted a net loss of Rs 103.97 crore for the quarter ended Sep 30, 2008 against the net profit of Rs 18.77 crore for the quarter ended Sep 2007. What was gratifying to note was that its net sales increased 51.07% to Rs.254.07 crore in Sep quarter of 2008 from Rs 168.18 crore in the corresponding quarter of previous year.

The company’s working for the quarter has been severely affected mainly due to stabilisation of commercial production at its processing facilities at Ranjangaon and adverse market condition particularly in the export market; over supply situation and high cost of raw materials driven by high crude oil prices not absorbed by the market in Polyester business and the lower sale in the Real Estate Division also impacted its revenue

The company has stated that commercial production of polyester staple fibre commenced from Oct 1, 2007 and hence the figures for the current quarter are not comparable with the corresponding quarter of the previous year.

What is worrying is that with effect from April 01, 2008, the company, MTM forex loss aggregating Rs.14.75 crore has been accounted for as a Hedging Reserve to be ultimately recognised in the profit and loss account when the forecasted transactions arise, as against the earlier practice of recognising the same in the profit and loss account, by marking them to market at the end of each period. This means, if it had accounted for the MTM forex losses, the net loss in Q2 would have been higher.

The company is developing eight lakh sq ft of property on its surplus land in Mumbai. It is redeveloping its Spring Mills property in Central Mumbai into a residential tower, 84% of which has been sold. The work at Dadar and Worli is also under way, with two commercial and IT/ITeS towers expected to be ready by 2009-10.

Currently textiles as well as realty remain under a cloud. Q3 is expected to be tough though Mr.Wadia expects the company to turnaround in the third quarter. Fingers crossed!
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GMR Infrastructure Good Long Term Stock No panic

GMR Infrastructure posted a drop in its PAT for the second quarter ended 30^th September 2008 on account of MTM forex losses. The stock has been hammered down relentlessly, yet, the long term growth story remains intact.

For Q2FY09, on a YoY, net sales was up 114.21% from Rs. 395.31 crore to Rs. 846.81 crore. EBITDA rose 58.72% from Rs. 155.71 crore to Rs. 247.14 crore. PAT (before notional forex losses) increased by 135.53% from Rs. 44.80 crore to Rs. 105.52 crore while PAT (after notional forex losses) declined by 6.05% from Rs. 49.58 crore to Rs. 46.58 crore.

The MTM forex loss was to the tune of Rs. 58.94 crore for the quarter, accounted mostly by two of the company’s subsidiaries - Vemagiri Power Generation Limited (VPGL) and GMR Hyderabad International Airport Limited (GHIAL), on the foreign currency project loans borrowed by them. The company has assured that these losses are notional and should the situation arise, these two subsidiaries have adequate dollar revenues to provide natural hedge for the currency fluctuations that may arise with respect to interest and principal payments/repayments. But for this forex loss, which is not an isolated phenomenon with GMR, the company had a very good growth story, a rise of over 100% in PAT despite the circumstances is commendable.

The company used the current global crisis in its favour and managed to renegotiate its acquisition cost of Intergen NV, thus reducing the cost by US$162 million. The Hyderabad Airport has started collecting User Development Fee (UDF) from domestic passengers from last week of August ’08 after getting the necessary approvals from Ministry of Civil Aviation. With this, Hyderabad Airport has also started realising all its revenue streams. The company soft launched its 308 room hotel at Hyderabad Airport. GMR also commissioned the cargo terminal at the Sabiha Gokcen International Airport (SGIA), Turkey, which it is re-building and will have a new passenger terminal by October 2009.

GMR continues to remain a very strong company. It is facing a selling pressure on the bourses, which is in concurrence with the ongoing slaughter by investors on realty and infra companies. At the current rates, GMR is an excellent long term buy. Stay invested, there is no need to panic, it’s long term growth story remains intact.
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